Table Of Content

2001 Annual Report Overseas” * t Private Investment Corporation | 8 . \ Table of conteyts > L - President's message ...... er rae ‘ A sharper agenda that matters more than ever .../..... Creating opportunities abroad ..............20% 9 Putting America’s best face forward... ......0.... 15 Fostering entrepreneurial success at home... ..... 19 leveraging investments and result ee Se 23 2001 investment projects 2... ee el 25 2001 investment funds’ projects... 2.2... 02. 002222.. 28 \ OPIC countries andwaseas. 2. ee ee 10) Financial statements... 2.0...ee le ee 31 Board of directors 2... 0.0000. ee ee eee 4] Officers and management... wa... ee ee 4] Photography credits... 00.0000 00. ee ee Se, 42 t'] : ) ‘| « ® President’s message ) aving originally ing private U.S. capital to spur sus- served OPIC in tainable development in new and the early days of emerging markets. OPIC’s success in the first Bush fulfilling this mandate has given life administration, | to the proposition that government joined anew last leadership in managing the risks asso- year with a firm belief in the agency’s ciated with foreign direct investment possibilities. It was a belief that took could effectively mobilize capital and My key priority root a decade ago from the perspec- human resources for development. in refocusing tive of that experience, and one that These resources would not otherwise has only grown stronger as I have have been made available. One meas- OPIC ts to had ample opportunity to observe ure of OPIC’s success is the growth of some of the countries strengthen that OPIC has helped A refocused strategic plan develop into mature, the agency's open and democratic market economies. consciousness of OPIC from other vantage points. OPIC has accomplished this This agency has had a long-standing mandate on a self-sustaining basis, its developmental impact in fostering economic devel- with room to spare. OPIC now is in opment abroad while helping to a strong position to face the continu- mission and strengthen the U.S. economy at ing challenges wrought by the tragic to ensure that home. When President George W. events of September 11 and the eco- Bush asked me to serve his adminis- nomic uncertainties exacerbated by OPIC’s products tration as president and CEO of those events. OPIC, I accepted the assignment with My key priority in refocusing are complementary, enthusiasm. I rejoined OPIC with an OPiC is to strengthen the agency’s appreciation of the organization’s consciousness of its developmental not competitive, outstanding record of accomplish- mission and to ensure that OPIC’s ments as well as a belief that the products are complementary, not with the agency can do more and, with a refo- competitive, with the private sector. cused strategic plan, can do it even The challenge is not static. Not every private sector. better. investment in a developing country During the past 30 years, OPIC is developmental per se. The type of has demoiistrated its unique value as investment that is effective in one an instrument of U.S. international country may not provide the same economic policy. First and foremost, balance of costs and benefits in OPIC has been a catalyst for mobiliz- another. What works in one phase of a country’s economic development OPIC’s policies on corporate social may not be as effective in other cir- responsibility and its agreements cumstances. I intend to strengthen with host governments can further OPIC’s developmental mandate by reduce risk. examining critically each proposed While some of the risks that investment in terms of its develop- OPIC faces can be identified readily mental impact, using the most as political or commercial in origin, other sources of risk may arise from unintended environmental and social Outreach toward underserved regions impacts. With guidance from the U.S. Congress and successive admin- istrations, OPIC has exercised lead- advanced methodologics and the bene- ership in finding ways to promote fit of OPIC’s experience and portfo- economic and social development, lio. With that knowledge, we will while at the same time protecting the refocus OPIC’s outreach toward environment, workers rights and underserved regions like sub-Saharan human rights in developing coun- Africa, as well as countries and sec- tries. OPIC’s leadership in this area tors where the developmental benefits has been recognized by other official are likely to be the greatest. and private lenders and insurers that I recognize that using our have come to see the value of inte- resources to support more develop- grating environmental and social mental projects may pose some considerations into their lending and added risks. This means that OPIC insurance policies. Now that the pri- continually must improve its under- vate markets have “gotten the mes- standing of and capacity to manage sage,” many private companies are risk. Toward that end, I am going beyond the requirements of strengthening the risk management law and are taking proactive meas- function at OPIC by bringing in ures to enhance their relationships new staff resources and technology with local communities. to bette> manage OPIC’s exposure Exercising leadership in this on both a portfolio and a project area means that OPIC must strive to level. I also am exploring how learn from the best practices of the emerging markets. OPIC therefore needs to work in tandem with private business to leverage private sources of financing and insurance to the maxi- 253,128 mum extent possible, while function- 221,878 ing as the “market of last resort” for projects that private investors and 147,201 insurers would not or could not sup- 115,508 port on their own. 72,765 U.S. Job To enhance OPIC’s cooperation Creation with the private market, I have taken cumulative 4,712 number of steps to initiate a much greater level , jobs created of cooperation between OPIC and the private insurance markets. OPIC most progressive companies and to needs to do things that the private use those practices in its approach to market will not — such as offering issues of corporate social responsi- greater tolerance for risky countries bility. The practice of corporate social responsibility is an integral part of risk management. As part of the reallocation of OPIC’s staff resources, | have combined the risk management, environmental and labor rights, and economic analysis 64,684 J] and project monitoring units into a $2,782 1996 new office headed by a vice president for investment policy. This office will have the same status as 28,919 }Y9Y] OPIC’s product divisions. 19,158 “U.S. Exports OPIC recognizes that the private 6,310 cumulative im millions sector is in the best position to recog- 687 198] of dollars 174 nize and respond to business opportunities and risks in developing and or projects, longer tenor, or larger sector. And it will provide an oppor- per project capacity. tunity to refocus our activities to To show our good faith in better reflect our mission by helping demonstrating that we are not com- to mitigate risk and support invest- peting with the private market, we ment in the emerging markets. In plan to initiate a program that will other words, everyone will win. help to ensure that OPIC’s involve- Both overseas development and ment is necessary — not a substitute U.S. economic growth increasingly for what already is available in the are dependent on the vital role of private market. From now on, the small and entrepreneurial busi- anyone applying for OPIC insurance ness sector. Despite its small staff, will have to demonstrate that a valid OPIC has done remarkably well in attempt was made to place the cover- reaching out to small and medium- age in the private market and that sized enterprises (SMEs), which con- such coverage was either not avail- stitute a growing percentage of able at all or not available at terms, project participants. In addition, conditions or rates that would allow thousands of SMEs participate as the investment to proceed. suppliers to OPIC-supported proj- This new test of additionality ects. However, OPIC’s location in will help to fulfill OPIC’s responsibil- our nation’s capital does not leave ity to find avenues for cooperation it well positioned to support compa- with the private market. It will nies that are geographically remote respond to OPIC’s need to comple- from Washington and are at the ment, not compete with, the private smaller end of the SME spectrum. Therefore, one of my first actions at OPIC has been to create a struc- tured arrangement with the U.S. Small Business Administration (SBA). This arrangement is designed to complement SBA’s capacity to reach and support small business with OPIC’s international expertise. 61 Finally, as both a government agency and a business, OPIC has an Number increasing obligation toward its stake- = of Small 12. Business holders to operate in a fully transpar- 1Y Projects ent manner. New telecommunications ‘oO 7 Ae (a ie: technologies, including but not limited to the Internet, have created greater expectations among the public for increased disclosure of all information, with the important exception of OPIC has that which is vital to national security or business confidentiality. | am com- exercised ~ mitted to enhancing the transparency of OPIC’s reporting and disclosures, leadership in as should be evident in this annual report. finding ways to promote CCONOMIUC and social devel yprient, Peter S. Watson while at the same President and CEO time protecting the environment, workers rights and human rights in developing COUNTTICS. usS Ss - Our work ts ¥ re well aligned ~~ CCOMOINIIC, POreien, environmental and labor policies. Streamlining the agency OPIC has taken measures to make our work more transparent to the public and@o make it easier for businesses to access resources and results. We responded to customer satisfaction surveys by making more information available electronically, including publications, press releases and applicafion forms. Now, business people can le9 arn about OPIC products and services in a matter of minuses. And they can use the investor's gateway section of our Web site to link to other sources of information about the countries in which OPIC operates. Online training programs for small businesses supply customized information. Doing business with OPIC has never been easier. www.opic.gouv » ( A/sharper agenda that matters more.than ever Know this about OPIC: No other OPIC plays an uncommon and American public or private organiza- indispensable leadership role tion invests in developing countries in developing emerging markets, with the scope and focus that we do. expanding global commerce and fos- We operate in more than 140 coun- tering democratic values worldwide. tries — financing economic develop- The unprecedented events of 2001 ment projects large and small and brought a fresh relevance to our mitigating economic and political work. People who have the economic risks. And we operate at no net cost and social opportunities that iead to American taxpayers. Over our to prosperity are far less likely to 30-year history, OPIC has built up become estranged from society or reserves of more than $4 billion and engage in violence than people with- has recovered or settled more than 94 out these opportunities. A strong percent of our insurance claims. defense against terrorism, then, is We make it possible for parched investing in the developing countries communities in Kenya to drill for that may harbor terrorists and forg- potable water and meet a basic human ing strong, positive bonds wth those need. We enable farmers in Guatemala nations. For 30 years, this has been to cultivate a new coffee plant, build a our core mission, and it matte:s more family-owned business, provide train- than ever in today’s uncertain times. ing and health care to workers, and In 2001, we sharpened our transport children to school. In Central focus, renewing our commitment to Europe, we pave the way for advanced economic development in places medical diagnostic facilities and skilled where it makes a profound difference jobs, while in Asia and Latin America, to human welfare. We are well posi- our support leads to affordable hous- tioned to stre:_gthen this impact in ing and the new beginnings it offers. the future. Our work is well aligned We make it possible for emerging mar- with U.S. economic, foreign, environ- kets to develop the infrastructure of mental and labor policies. In short, airports, utilities and telecommunica- OPIC is good for the world and good tions that will bring millions of people for America. into the global economy. We accomplished this and much more in 2001. °* es oe \ Economic development in emerging markets around. the world ®